Monday, June 4, 2012

Scope of next week's Apple-Motorola trial in Chicago could still be narrowed

On Sunday, Judge Posner entered an order in the Apple v. Motorola litigation in Chicago that just showed up in the public record and addresses a very interesting and unusual situation. Simply put, there will be some decisions later this week that could further narrow the scope of the trial or, if all of them succeeded, might eliminate the need for any trial.

Judge Posner had already achieved a substantial narrowing of the case by pressuring the parties to drop claims and by adjudicating a large number of summary judgment motions. The case is down from 15 Apple patents to 4, and from 6 Motorola patents to 3. The trial is scheduled to start next week (with the first part focusing on Apple's infringement claims, followed by a second phase on Motorola's claims and, if there's a liability finding in Phase Two, a FRAND trial). But some further narrowing could result from the parties' latest summary judgment motions, in which the parties ask Judge Posner to determine that the opposing party cannot prove damages -- since the parties' Daubert motions (motions against unresaonable damages claims) were wildly successful -- and "should not be awarded an injunction even if it succeeds in proving liability at the upcoming liability trial". In connection with the second item, Judge Posner notes that "actually Apple has not moved for summary judgment of no-injunction, but it has until [today] to do so". I'm sure Apple will bring such motion given that Motorola's two remaining patents-in-suit are FRAND-pledged declared-essential patents. Apple has a clear and consistent "no injunction" position on FRAND patents, which companies like Microsoft and Cisco as well as a bipartisan majority of the Federal Trade Commission support.

Judge Posner will await the parties' opposition briefs, which are due on Wednesday, before ruling on these motions, but his Sunday order prophylactically raises the question of what's left for the court to decide in the event of "summary judgment barring both injunctive and monetary relief with regard to any patent" (and that could ultimately affect all patents-in-suit). Judge Posner expresses his preliminary assessment that even the parties' declaratory judgment counterclaims (asking the court to hold a patent invalid and not infringed) would be beyond the court's jurisdiction if liability is moot since there won't be any remedies anyway. In that case, Judge Posner feels he "would have to exclude the patent from the liability trials", given that declaratory judgment is meant to be a "time-saving device" that can protect against a hypothetical lawsuit -- but not really meant to address moot issues. However, Judge Posner says he isn't sure of this ("maybe there are special rules governing patent litigation that bear on the question") and asks counsel to comment on this in the reply briefs due on Wednesday (and to be prepared to address this at the pretrial conference on Thursday).

Judge Posner's question isn't an extremely strong indication that this trial will be reduced in scope or even canceled, but he wants to be prepared for a particular situation. In my opinion, injunctive relief should not be available on the basis of standard-essential patents, but it would be fair for Motorola to get paid at a FRAND rate. In Apple's case, its original damages claims may have been excessive, but it should also get a chance to obtain some compensation. Given that Apple's patents-in-suit aren't subject to FRAND licensing obligations and that Apple and Motorola are direct competitors, I don't agree with Motorola that it's impossible for Apple to show irreparable harm and meet the other criteria for injunctive relief with respect to any of its remaining patents-in-suit, but Motorola may be right with respect to some of them. Motorola's motion for summary judgment that Apple is not entitled to a patent injunction over non-standard-essential patents is, however, quite remarkable in light of Motorola's aggressive and unrelenting pursuit of injunctive relief over FRAND-pledged patents against both Apple and Microsoft in the United States as well as in Germany.

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About Me

Florian Mueller is an app developer who used to be an award-winning intellectual property activist. His 30 years of software industry expertise span different market segments (games, education, productivity and infrastructure software), diverse business models, and technical and commercial areas of responsibility. In recent years, Florian advised a diversity of clients on the patent wars surrounding mobile devices, and on their economic and technical implications. (In order to avoid conflicts of interest, Florian does not hold or initiate transactions in any technology stocks or derivatives thereof, except that he is long AAPL.) He is now developing games for smartphones and tablet computers.